Still Accountable: The Downside of Growth

An article on the downside of growth caught my eye recently with implications for my life as a retiree. It was on a population explosion in the Delaware county where I now live and its consequences.

Sussex County, Delaware, is not the same place it was in 2019 when I bought the home I live in today. Sussex is the southernmost county in Delaware roughly bordered by Maryland to the south and west, Kent and New Castle County to the north, and the Delaware Bay and Atlantic Ocean beaches to the east. It has historically been dominated by corn and silage fields, chicken farms, pine forests, and small(ish) beach communities for summer tourists and a few lucky locals.

The Population Surge 

Since 2020, more than 40,000 new residents have swelled the population by almost 20 percent straining the utility infrastructure, roads, schools, services, and healthcare. New housing developments are going up everywhere but two steps behind the pace of growth and needed zoning changes. Like me, these residents were attracted by low real estate taxes, moderate personal income taxes with exclusions for Social Security and some retiree income, and NO SALES TAXES on anything.

Thankfully, my new state is still able to rely on corporations choosing to domicile in Delaware (due to favorable laws and regulations) as a large source of funds in the state budget. This is safeguarded by a few hawks in state government who recognize its importance.

Service industries, including healthcare, are frantically trying to grow and serve these new residents who are largely wealthier, older, and used to high levels of service in places like Pennsylvania, New Jersey, New York, and the Washington, DC, metro area from where they migrated. I was lucky and found availability of physicians and NPs to keep my 65-year-old self-going. 

Now – I hear horror stories from newer neighbors of six-to-nine-month waits for primary care appointments and specialist waits that can be even longer. Service and healthcare hiring is surging (making up some of the population surge), but the state has been and is considered “Medically Underserved” by the federal government. Health systems are expanding but areas still considered rural are facing Medicaid budget reductions from the not so beautiful - big beautiful bill starting in FY27, which will shrink their topline revenue and affect choices. It’s all related.

Nursing Home Supply

The nursing home bed supply in my Sussex community is tight with about a dozen licensed nursing homes and the bed count at 1,364 up slightly from 1,290 in 2020. One new nursing facility with 26 beds opened in 2020 as part of the redevelopment of an old hospital site, but no new nursing homes have been built in Sussex County since then. That same 26-bed facility appears to be the only new facility statewide since 2020. Like the rest of the nation, there have been changes in ownership, new facility names, and organic growth but that’s it.

Here’s another rub: the population of Sussex residents 80 years old and older will more than double by 2040. (I turn 80 in 2041, so it has to be true😊)  

Is there a solution to the future demand for nursing homes that my generation will create?  As always, the solution is money, time, government processes that promote growth and provide safeguards, and developers and operators who want to invest.

The State Role

Enter the state of Delaware’s processes, which includes a CON-type system that measures bed-need by county. A Delaware Health Resources Board (HRB) examines applications for new medical facilities including nursing homes. The review generates a Certificate of Public Review (CPR) record and hopefully an approval to proceed. 

In my brief research, I didn’t find evidence that the state’s lack of growth is tied to the HRB turning down applications; I found that while there are a lot of large projects going on, none is a new nursing facility.   

So why is this the case? Could it be that the HRB/CPR system discourages developers from submitting new projects? Are nursing home projects economically viable given the Medicaid rate environment? Both of these may be true as there was legislation introduced in the General Assembly to terminate the HRB effectively eliminating the current CPR system. Is this too much? There is also a 2026 Rural Health Transformation Plan that broadly commits to reducing regulatory barriers to establish new facilities in underserved rural communities.   

It seems my little beach community has hope for the future. I guess I’ll stay until 2041 and see how it turns out.

Martin Allen is the former senior vice president of reimbursement policy for the American Health Care Association/National Center for Assisted Living. He also served as the vice president of revenue cycle and reimbursement services for ProMedica Senior Care (formerly HCR ManorCare). A certified public accountant with a master’s in business administration, Allen has more than 35 years of extensive work in accounting, Medicare and Medicaid reimbursement, healthcare compliance, risk management, and revenue cycle processes.

Any thoughts on this article? Please contact Patrick Connole at pconnole@parkplacelive.com.